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Islamabad, [Date] – In a move aimed at strengthening fiscal federalism and ensuring equitable distribution of resources, President Asif Ali Zardari has officially established the 11th National Finance Commission (NFC). This crucial body will be responsible for formulating a new National Finance Commission Award, outlining the framework for sharing federal divisible resources between the central government and the provinces.

The National Finance Commission plays a vital role in Pakistan's governance structure. Its primary function is to periodically review and recommend the principles governing the distribution of federal taxes and other revenues among the federal government and the four provinces (Punjab, Sindh, Khyber Pakhtunkhwa, and Balochistan). The NFC Award is a legally binding agreement that shapes the financial relationship between the Centre and the provinces, influencing development spending, social programs, and overall economic stability.

The establishment of the 11th NFC comes at a critical juncture, as Pakistan navigates economic challenges and strives for sustainable growth. The new award will likely address evolving needs and priorities, taking into account factors such as population growth, poverty levels, and regional disparities. Key areas of focus are expected to include:

• Population Distribution: Refining the formula to accurately reflect population shifts and ensure provinces receive adequate funding based on their demographics.
• Revenue Collection: Addressing the complexities of revenue collection and proposing mechanisms to enhance provincial capacity in this area.
• Special Needs: Considering the unique challenges faced by certain provinces, particularly Balochistan, and incorporating provisions to address their specific requirements.
• Performance-Based Incentives: Exploring the possibility of linking resource allocation to provincial performance in areas such as revenue mobilization, fiscal discipline, and service delivery.

The composition of the 11th NFC is expected to include representatives from the federal government and each of the four provinces. The Commission will engage in extensive consultations with stakeholders, including economists, academics, and provincial finance ministers, to develop a comprehensive and equitable award.

President Zardari’s decision to form the 11th NFC demonstrates the government's commitment to strengthening intergovernmental relations and fostering a more balanced and prosperous Pakistan. The new NFC Award will be a cornerstone of this effort, providing a solid foundation for sustainable economic development and improved governance across the nation. The process is anticipated to be transparent and inclusive, ensuring all stakeholders have a voice in shaping the future of Pakistan's fiscal landscape.

The successful implementation of the new NFC award will require a collaborative approach and a willingness to compromise. It’s hoped that the Commission will be able to forge a consensus-based agreement that addresses the diverse needs and priorities of all provinces, contributing to a more unified and equitable Pakistan.